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U.S. Attorney has new evidence for Grinstead sentencing

This is the view from the boardwalk at the beach house where Scott Grinstead has requested to serve home arrest instead of 33 months of prison time as recommended by the U.S. Attorney's office. The government included this photo in its pre-sentence brief in relation to criminal acts Grinstead pleaded guilty to at Adams Produce, Birmingham Ala.

Scott Grinstead, former chief executive officer of Adams Produce, is set to be sentenced Oct. 29, for his role related to a scheme at the Birmingham, Ala., company to defraud the government.

He has asked to be on house arrest for 14 months at the $1 million-plus beachfront house in Florida that he shares with his family.

The assistant U.S. Attorney recommends 33 months in federal prison and three years’ probation.

The judge could impose the maximum possible, which is up to 25 years in prison and $700,000 in fines, though it is uncommon for federal judges to do so if the prosecutor does not recommend it.

Grinstead is guilty of much more than he admitted to in his plea agreement, according to a pre-sentence brief filed by George Martin Jr., assistant U.S. Attorney.

Through the agreement, the government did not charge Grinstead with fraud in relation to a scheme by which Adams Produce defrauded the government of more than $480,000 for fresh produce for the military and schools. Instead, Grinstead agreed to plead guilty to failing to report the scheme.

“There is evidence, however, that the defendant has continued lying about when he learned of the scheme,” states the government’s pre-sentence brief. “Indeed, he actually knew of the scheme from its inception. The U.S. will present evidence during sentencing to prove the defendant’s earlier participation in this fraud scheme.”

Grinstead pleaded guilty April 17 to four criminal federal charges in relation to the scheme and other activities at Adams Produce. He also admitted to failing to file personal income tax returns for 2009 and 2010.

He negotiated a plea agreement with the U.S. Justice Department under which the government agreed to not charge Grinstead for failure to file income tax returns for three other years.

In his own pre-sentence brief, Grinstead told the judge he should be given a light sentence because he paid $450,000 in restitution to help offset money owned to Adams Produce employees when the company unexpectedly closed and filed for bankruptcy in April 2012.

He also says he deserves leniency because he was a victim of the scheme himself. He also contends in his pre-sentence brief that the judge should go easy on him because for the three years he failed to file income tax returns — that the government agreed to not charge him in — he would have been due $120,000 in refunds that the government did not have to pay him.

The U.S. Attorney’s pre-sentence brief dismissed Grinstead’s arguments for leniency saying that he “abused his position of trust” and “selfishly committed fraud against the company and its 400 employees.”

Other new information in the government’s pre-sentence brief states Grinstead inflated Adams Produce financial statements, forged the signature of another company’s chief executive officer and counterfeited confirmation letters regarding the company’s accounts.

“The defendant committed this fraud … so that he could wrest control from the family who founded and owned the company for over 100 years (and) increase his personal ownership stake and enrich himself,” the government brief states.

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About the Author:

Coral Beach, Staff Writer

Coral Beach joined The Packer newsroom in February 2011, bringing more than 30 years of experience at daily newspapers, trade magazines and online publications. Beach earned a bachelor’s of science degree from the University of Kansas School of Journalism in 1982.
e-mail: cbeach@thepacker.com
phone: 913-438-0781